Mortgage Overpayment Limits: How Much Can You Pay Off?

Most fixed-rate mortgages let you overpay 10% a year without an early repayment charge. That much is widely known. What catches people out is the detail underneath it, because two lenders quoting "10%" can give you very different amounts.

The three things that actually decide your allowance: what the 10% is measured against, when your allowance year resets, and what happens to anything above it.

At a glance

Typical allowance: 10% a year
Measured against: Original balance or current balance — check which
Allowance year: Often the anniversary, sometimes 1 January
Above the limit: Early repayment charge, usually 1–5%
On SVR or a tracker: Often unlimited

Key Takeaways

10% is the norm on fixed deals, but it is a contract term, not a legal right — some allow more, some less.
Check the base. 10% of the balance you originally borrowed is more than 10% of what you owe now.
Check the reset date. Many run from your mortgage anniversary, not from January.
Overpaying above the allowance triggers an early repayment charge, typically a percentage of the amount repaid.
Standard variable rate and most trackers allow unlimited overpayments with no charge at all.

The three things that differ

What the 10% is a percentage of

This is the biggest variable. Lenders measure the allowance against either:

The original loan amount, fixed for the whole deal, or
The balance outstanding at the start of each allowance year, which shrinks as you repay

On a £200,000 mortgage that has come down to £150,000, the first gives you £20,000 a year and the second £15,000. Same headline percentage, £5,000 difference.

When the allowance year runs

Some lenders reset on the anniversary of your mortgage or product start. Others reset on 1 January. A few run to the product end date.

Get this wrong and an overpayment you thought was in this year's allowance lands in last year's, taking you over the limit.

Whether unused allowance carries over

Usually it does not. If you overpay nothing in year one, you rarely get 20% in year two. Treat each year as use-it-or-lose-it.

Where to find your actual number

Do not rely on a general figure, including the ones above. Check in this order:

Your mortgage offer document. The early repayment charge section states the allowance, the base it applies to and the reset date. This is the definitive source.
Your annual statement. Many now show the remaining allowance for the current year.
Your online account or app. Most major lenders display it, and some let you make the overpayment there.
Ring them. Ask three specific questions: what is my allowance this year, what is it measured against, and when does it reset.

Rates and terms change with each product, so a figure that applied to your last deal may not apply to this one.

What the charge actually costs

If you exceed the allowance, an early repayment charge applies to the excess. It is normally a percentage of the amount repaid, commonly between 1% and 5%, and it usually steps down each year of the fixed term.

Two things worth knowing:

The charge often applies only to the excess, not the whole overpayment. Going £1,000 over on a 3% ERC costs £30, not 3% of everything you paid.
Paying the charge is sometimes still worth it if you are clearing the mortgage entirely or remortgaging to a much cheaper rate. Do the arithmetic rather than assuming it is always wrong.

Term or payment: the choice nobody offers you

When you overpay, most lenders will by default reduce your monthly payment and leave the term unchanged. That feels good but saves far less interest.

Ask them to reduce the term instead. You keep paying the same amount, the mortgage ends sooner, and the interest saved is substantially larger. It is the same money, applied differently, and you usually have to request it explicitly.

When you can overpay without any limit

On the standard variable rate. Once a fixed deal ends and you roll onto SVR, there is normally no early repayment charge at all.
On most tracker mortgages, though check — some trackers do carry charges.
In the final months of a fixed deal, some lenders drop the charge in the run-up to expiry.

If you have a lump sum and you are near the end of a fix, waiting a few months can save the charge entirely.

Before you overpay at all

Overpaying is not automatically the best use of money:

Clear higher-interest debt first. A credit card at 24% costs far more than a mortgage at 4%.
Keep an emergency fund. Money paid into a mortgage is very hard to get back out.
Compare against savings rates. If a savings account pays more after tax than your mortgage rate, saving wins.
Consider pension contributions, where tax relief may beat the interest saved.

Our mortgage overpayment calculator shows the interest and time saved for your own numbers.

Frequently asked questions

How much can I overpay my mortgage each year?

Usually 10% a year on a fixed-rate deal, but it is a contract term rather than a rule, so check your offer document. The key detail is whether that 10% is measured against your original loan or your current balance, which can differ by thousands of pounds.

Is the 10% based on the original loan or what I owe now?

It depends on the lender, and it is the question worth asking. Measured against the original amount you get a fixed allowance for the whole deal. Measured against the outstanding balance, your allowance shrinks each year as the mortgage reduces.

What happens if I overpay more than my allowance?

An early repayment charge applies to the excess, typically 1% to 5% of the amount over the limit, often reducing each year of the fixed term. It is usually charged only on the excess rather than the whole overpayment.

Should overpaying reduce my term or my monthly payment?

Reducing the term saves considerably more interest, but most lenders reduce the monthly payment by default. If you want the term cut instead, you generally have to ask for it specifically.

Can I overpay without any limit?

Usually yes once you are on the standard variable rate after a fixed deal ends, and often on tracker mortgages, though not always. If you have a lump sum and your fix is nearly over, waiting until it expires can avoid the charge altogether.